Brampton's strategic reserve down from $200M to $9M in 3 years
CBC
A key reserve fund in Brampton has dropped from $200 million in 2021 to $9.5 million last year, sparking concern among some that the city may struggle to handle unplanned expenses in the future.
The city's strategic reserve was created after the sale of Hydro One Brampton in 2002, which netted the city some $200 million. The fund was intended to be maintained at that level, according to a 2021 staff report.
However in recent years, the city has used the reserve to pay for things like acquiring property to lure universities to set up campuses in Brampton, without putting money back into the fund.
Brampton's mayor is defending the spending and city staff say council has chosen to spend now rather than let the value of the funds decline due to inflation. But experts and some city councillors warn the city will face a bigger financial squeeze as a result and that new taxes or infrastructure levies may be needed in the future.
"It was shocking to see the decrease in the strategic reserve," former Brampton councillor Jeff Bowman told CBC News. "Those reserve funds are meant to be used for very important projects."
Bowman says those projects include things like the riverwalk – a downtown revitalization plan to mitigate risks of the Etobicoke Creek floodplain.
The strategic reserve balance was released in May with as part of a report on the the city's other reserve funds, which total of half a billion dollars. However, city council hasn't released a plan at this time to replenish the strategic reserve.
A city spokesperson told CBC News in an emailed statement there is an "uncommitted" plan to replenish the strategic reserve with $62 million in the future.
"The current term of council has been actively utilizing these funds for their intended purpose rather than allowing their value to be eroded by inflation," the spokesperson said.
The top items of spending for the duration of 2021 to 2023, according to a city document released at council, were: $40 million on property acquisition, $27 million on the Toronto Metropolitan University medical school and $7.3 million on Algoma University expansion.
Mayor Patrick Brown has been in charge while the strategic reserve has depleted.
Brown has defended spending, saying. "We want to make sure that when we pass projects as a city that we're moving those projects along."
Brown has frozen property tax rates since first being elected in 2018 and has said he intends to hold any increase below the rate of inflation.
"People are struggling to make ends meet, struggling to pay for groceries, struggling to pay their property taxes. If we're going to take funds from residents, it has to be for a stated, transparent purpose that is well known," Brown said.
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